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Microsoft’s Antitrust Headaches Continue Despite Demise Of Intuit Deal

Tue., May 23, 1995, midnight

By scuttling its plan to buy Intuit Inc., Microsoft Corp. shed a bothersome antitrust challenge, but the company’s lawyers still have work to do.

The world’s leading maker of personal computer software is coping with another antitrust case settled last summer but rejected by a judge this winter. In addition, a third case could soon emerge challenging whether Microsoft unfairly uses its size and clout to link products and limit competition.

Some observers have suggested the Justice Department may look into complaints by on-line companies about Microsoft’s plan to equip the software for its forthcoming Microsoft Network with its Windows 95 product.

“They’re not going to challenge Microsoft for coming up with an on-line service,” said Susan Halling, a San Francisco attorney who used worked in the Justice Department’s antitrust division in the early 1980s. “It’s the tying issue, linking it with other products that I’m sure they’ll pay close attention to.”

Such a tactic is known as “monopoly leverage,” using a strong position in the sale of one product to gain sales for another, and is hard to prove.

“The monopoly leveraging theory is kind of a shaky ground for bringing a cause of action,” said Paul Hilal, senior associate at Broadview Associates, a Fort Lee, N.J., merger and acquisitions advisory firm that specializes in technology. He noted the Justice Department did not rely on it in the Intuit case.

Several executives of on-line services have said they were interviewed by the Justice Department earlier this year. The department said through a spokeswoman that it doesn’t comment on speculation about investigations.

But William Neukom, Microsoft’s general counsel, said Monday, “There is no investigation open about Microsoft Network that I’m aware.”

There could be action on the rejected settlement as soon as Tuesday and, unlike the Intuit deal, Microsoft has the Justice Department on its side in this matter.

A federal appeals court in Washington heard arguments for turning back the rejection a month ago and is believed to be close to ruling. The court typically issues rulings on Tuesday or Friday.

At issue is a settlement that forced Microsoft to eliminate certain sales incentives for personal computer operating systems, its core product.

U.S. District Judge Stanley Sporkin rejected the settlement in February, saying he wanted more information than the Justice Department and Microsoft were willing to provide about how they reached it.

Microsoft first came under government scrutiny five years ago when the Federal Trade Commission agreed to look into competitors’ complaints about Microsoft business practices.

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